BHUTAN TODAY The New Perspective
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Sonam Deki
In response to the sluggish recovery of the tourism industry, the government has introduced supplementary incentives and policy measures designed to rejuvenate the industry. This strategic initiative aims to offer a much-needed boost to the struggling tourism sector, which has not re-bounded as initially anticipated.
The recently announced measures emphasize the government’s recognition of the vital role played by the tourism industry in driving economic activities. The sector is not only a significant source of job creation but also a major contributor to foreign exchange earnings. Additionally, the initiative is expected to unlock potential benefits for various related industries, fostering overall economic growth.
The government’s initiative stance reflects its commitment to supporting and nurturing the tourism sector during these challenging times. The additional incentives and policies are designed to encourage tourist inflow and increase activity within the industry, ultimately leading to its resurgence and greater economic stability.
In a recent development, a set of revised incentives and measures has been introduced, targeting tourists visiting Bhutan who make payments in US Dollars. A noteworthy adjustment concerns the prevailing Sustainable Development Fee (SDF) structure. As part of this modification, a substantial 50 percent reduction has been implemented on the existing USD 200 SDF, leading to a revised fee of USD 100 per person per day for US Dollars paying tourists visiting Bhutan.
In addition to the aforementioned changes, additional adjustments have been implemented in the structure of the Sustainable Development Fee (SDF). Children aged between 6 to 12 years, who are visiting the country and making payments in US Dollars, will benefit from a fifty percent reduction in the SDF. Meanwhile, the ongoing exemption from the 24-hour SDF for tourists staying in border towns will continue unaffected. These measures are intended to offer increased flexibility and advantages for tourists facing diverse circumstances, all while providing support to Bhutan’s tourism industry.
Garab Dorji, Chairperson of the Guide Association of Bhutan, said, “With these incentives, we anticipate a significant rise in the number of tourists. As tour operators, we’re discussing how these measures will facilitate the promotion and sale of tours. If that comes to fruition, we can certainly expect an influx of tourists. Moreover, even for guides, the only requirement is a hotel to operate from. Selling tours becomes challenging when the trip is costly, unless one possesses proficient marketing strategies. This change will undeniably yield benefits, as tourists will be paying USD 100 less. The reduction from USD 200 to USD 100 in the Sustainable Development Fee will enable middle-class individuals who previously found it inaccessible to afford the visit. The numerous guides in our industry will also reap advantages. We have approximately 1500 tourist guides across the country.”
A travel agent who requested anonymity remarked, “Any initiative aimed at benefiting the industrial sector is advantageous. Ideally, such actions should have been initiated from the outset, but their implementation is currently underway. Presently, this news is being warmly embraced by an industry grappling with challenges. It seems that the government acknowledges that, despite a year having passed, the industry has not exhibited signs of improvement. However, this sentiment is one we have consistently expressed. The sudden imposition of a USD 200 SDF (Sustainable Development Fee) caught us off guard, particularly in the Asian market where tourism wasn’t as widespread. This decision not only affected the general public but also left us with no recourse due to its unexpected nature. The absence of prior discussion stood as the primary point of contention.”
Tenzin Tashi, a tour operator from Impress Bhutan Travel, commented, “When compared to the previous scenario, these incentives will undoubtedly bring substantial benefits to the industry. There was a Thai group that expressed interest in visiting Bhutan, but they were startled by the new SDF, which rendered the trip expensive for them. With the reduction of the SDF to USD 100, I am now contemplating getting in touch with them.”
Ugyen Tshewang, a freelance tour guide, shared, “What we tour guides need the most are more tourists. When the SDF was increased, there were fewer guests, and as freelancers, we encountered fewer issues. However, permanent tour guides faced more challenges. The decline in the number of tourists was primarily attributed to the elevated SDF. With the reduction now implemented, we are anticipating a positive change.”
Karma Jamtsho, another tour guide, added, “In the past, visitors had to pay an SDF of USD 200. Now that it has been reduced to USD 100, it will undoubtedly yield long-term benefits for the industry. We used to keep in touch with our previous guests, discussing their experiences and the SDF. When the government initially introduced the SDF, it caught them off guard. Recently, I informed them about the new incentives from the Department of Tourism. They received the news with genuine delight and expressed their excitement.”
Commencing from September 1, 2023, the aforementioned incentives are set to be activated and will remain in effect for duration of four years, till August 31, 2027.
Furthermore, the Government will be conducting periodic assessment of both domestic and international tourism conditions. Subsequent to August 31, 2027, there is a possibility that the aforementioned incentives might be ceased, aligning with Bhutan’s overarching strategy to uphold and advance the High Value Low Volume Tourism Policy.
In September 2022, Bhutan increased the daily SDF to $200 from $65 to boost its tourism revenue. In the following year, it rolled out a scheme that lowers the Sustainable Development Fee (SDF) for tourists who stay more than four nights in the country in a bid to attract more visitors and entice them to stay longer. The new rules introduced in June 2023 reward tourists who pay the SDF for four days with an extra four days, while those who pay 12 days are allowed to stay for a full month.
